The demographic is a fixture in
marketing research, but psychographics contribute to our demographic
understanding by examining a wide range of factors that focus on the
quantitative and psychological perspectives of why consumers behave the way
they do. This paper examines the concept of psychographics, its origins, and
the debate over reliability and validity. Two of the more accepted tools, VALS
and RISC are examined in detail, and some of the current uses of psychographics
are also reviewed.

The
Evolution from Demographics to Psychographics

The demographic profile is a fixture in marketing research;
profiles are collected as a matter of routine in the belief that age, income, education
and other measurable factors can indicate product or brand preference, media
preference or preference about programming choices (Wells, 1975). Demographic
information has severe limitations, however. Demographics are not homogenous
blocks, and can lead to over simplification, stereotypes of demographics may be
incorrect, and demographics do not really provide guidance in marketing
messages, the consumer’s problems and needs or what their lifestyles or values
are (Langer, 1985). The reason a person buys a particular product or brand, or
has explicit media preferences go beyond how old the person is or how much
money the person makes (Bainbridge, 1999). The Holy Grail of marketing is based
on discovering that succinct difference of between what consumers do and why
they do it (Booth, 1999). However, it wasn’t until the social upheavals of the
1960s, which shattered the mass-market approach, that methods of measuring the
values and lifestyles of consumers were developed (Heath, 1995).

Demby (1994) claims to be the first person to make up the name
psychographics in 1965, although he admits that the term was used as early as
World War I to describe a method of classifying people by physical appearance,
rather than demographics. It later evolved in the 1920s as a term used to
classify people by attitudes. Heath (1995) notes that the term appeared in Grey
Advertising’s publication Grey Matter in 1965, and that Haley was the first to
publish the term. Demby’s own description uses the term to combine psychological,
sociological and anthropological factors such as self-concept and lifestyle to
segment markets by purchase decisions or media use; demographics are used as a
check to see if psychographic segmentation improves on other segmentation
methods (1994).

The
Definition of Psychographics

Heath (1995) notes that if ten marketers were asked to define
psychographics, ten different answers would be received. Eckman, Kotsiopulos
and Bickle (1997), using the construct developed by Tigert in the 1970s (Demby,
1994), assert that psychographics measures lifestyles that are evaluated
through activities, interests and opinions, and that psychographics are more
effective than demographics. Silverberg, Backman and Backman (1996) state that
psychographics is a way of describing customers and charting new trends. Booth
(1999) describes psychographics as the why of consumer behavior, attempting to
ascertain the motivation behind consumer purchasing decisions. Wyner (1992)
calls psychographic measures attempts to isolate personality types across
product category boundaries. Wells (1975, p.197), in his award-winning article
for the Journal of Marketing Research, notes that psychographics are something
beyond demographics, but that the dimensions studied in the field encompass “a
wide range of content, including activities, interests, opinions, needs,
values, attitudes and personality traits.” However, his interpretation allows
this wide range, when he defines psychographics operationally as “quantitative
research intended to place consumers on psychological—as distinguished from
demographic—dimensions” (Wells, 1975, p. 197). Hasson (1995) adds to this,
positing that psychographics may be the ultimate phase of motivation research
developed in the 1950s, using quantification, multi-dimensional analysis and
graphic representation. The one thing most researchers seem to agree upon is
that geodemographic tools, such as PRIZM or Donnelly Marketing’s ClusterPlus,
that describe averaged demographic information about product usage by
geography, do not fall into a psychographic definition (Heath, 1995). Although
they fit the lifestyle definition portion of psychographic definition and have
been used to examine lifestyle imagery and reference groups (Englis &
Solomon, 1995), they do not fulfill the psychological dimension of the
operational definition; however, they do offer one benefit when used in
conjunction with psychographic information: They also identify where the
consumer lives (Heath, 1995).

How Psychographic Measures Are
Conducted

The original psychographic studies were primitive by nature,
using Q clustering programs that were computer driven, although computing power
had its own limitations (Demby, 1994). The clustering program used is actually
an inverse factor analysis, and is also called Q-factor analysis (Heath, 1995).
Basically, it looks for correlations between pairs of respondents, and then
clusters respondents who have high correlations to similar answers (Heath,
1995). Typical psychographic studies today show consumers a large list of
statements and they are asked to indicate on a five to seven point Likert scale
how well each statement describes their attitudes or lifestyles; factor
analysis is then used to identify underlying factor loading patterns, upon which
factor scores are computed, and either principal component analysis or varimax
rotation of retained components is used to approximate a structure in which
each variable correlates highly with only one factor (Wind, Rao & Green,
1991).

The
Debate Over Psychographic Reliability and Validity

While seemingly straightforward, there has been much debate
about the reliability and validity of psychographic research in terms of
individual items and scales, reliability of dependent variables, relationships,
and structure.Wells (1975) notes that
the scales used most by psychographic researchers, published in literature
reviews, indicate reliabilities from .70 to .90. Due to the instability of
consumer choice, perhaps the most that can be expected from psychographic
research is satisfactory reliability; however, if important decisions are made
with psychographic information, cross-tabulations, regression or
cross-validation against hold out samples are recommended (Wells, 1975).

Equally problematic for psychographic measurement is validity,
the degree to which the psychographic tool is measuring what it is supposed to
be measuring (Isaac & Michael, 1995). While some measures of validity, such
as construct validity, are handled in the same manner as reliability, using
hold out samples (Wells, 1975), the predictive validity of psychographic tools
is much more difficult to ascertain. Often these tools are measured against
other psychological constructs to compare performance. SRI introduced VALS as a
psychographic tool in 1978, and the instrument segmented consumers into nine
groups based on their inner/outer orientation; it was the only commercially
available psychographic tool to gain a large measure of acceptance(Riche, 1989). Kahle, Beatty and Homer (1986)
conducted a study that indicated Rokeach’s List of Values (LOV) was a better
predictor of consumer behavior than the original Values And Lifestyles (VALS)
assessment tool. However, in a follow-up replication study, Novack and MacEvoy
(1990) found serious methodology flaws in Kahle, Beatty and Homer’s study.
Kahle et al. believed that because VALS had demographics built-in, but LOV did
not, they included demographics in the regression model for LOV, but not for
VALS (1986). In their replication, Novack and MacEvoy (1990) ran the same
experiment, with extensions that included adjusting each instrument for
demographics, ignoring demographics, and using demographics solely against LOV.
Their conclusion was that VALS may be preferred over LOV as a segmentation
tool, and that LOV was significantly less predictive than even VALS alone. They
also noted that these findings could not be generalized to VALS’ eventual
successor, VALS2. Novack and MacEvoy’s approach makes sense, since the intent
of psychographic measurements is to add a dimension to demographic measures
(Langer, 1985).Bainbridge (1999)
agrees, noting that psychographics are an extension of demographics. Heath
(1995) confirms that the purpose of psychographics is to measure demographic
characteristics along with attitudes, opinions and interests.

However, this was not the sole study finding some validity
problems with psychographics in general, and the original VALS typology in
particular. Lastovicka, Murry and Joachimsthaler (1990) measured the VALS
typology and the Drinking-Driving (DD) typology quantitatively, using
statistical modeling, and qualitatively, using judgmental coding of data
collected from open ended and projective tasks. They used a
multimethod-multitrait approach, and ANCOVA structures (LISREL) approach to
examine the convergent and discriminant validity of each tool. They found less
convergent and discriminant validity for VALS than for DD. Unfortunately, as
they note, a major limitation of their study was that it was against a small
sample of 100 18 to 24 year old men, and using a different sample against of
the general U.S. population could produce differing results; additionally,
there were logical subgroupings of VALS types other than those used in their
research. They also noted that SRI, the owners of VALS typology were
introducing VALS2, which might make their research findings mute.

Wells (1975) points out three problems relating to the studies
such as Lastovicka et al. (1990): Using psychographics to find relationships
that should not have been expected and they fail to appear; When the finding is
too abstract to be useful; When the measurement is so close to the behavior
studied that the relationship is essentially redundant. However, popular and
accepted psychographic measures do have these inherent dangers, too, which led
to the downfall of the original VALS. Because VALS did not discriminate enough,
the measurement, to some, was redundant. It contained one of the problems
clustering can be prone to: Lack of discrimination among segments. “People
would say, ‘If 40 percent are Belongers, why should we bother with the rest”
(Riche, 1989)?Not only did marketers
complain that VALS was not actionable, the originator of VALS, Arnold Mitchell,
made a research design error, trying to prove an assumption. Designing the
study in an attempt to prove Maslow’s theory of motivation, Mitchell placed a
preconceived truth into the design (the assumption was that people buy
according to where they fall in a hierarchy of needs), rather than attempting
to discover what the real truth behind consumer motivation was (Heath, 1995).
Not all researchers were that disenchanted with the original VALS, although
there was agreement that the Belongers group needed to be split (Winters,
1992). However, some of those who liked the original VALS also shared in
Mitchell’s Maslow based approach to its theoretical underpinnings and
complained that VALS2 had no theoretical approach (Winters, 1992).

VALS2
and RISC Ameriscan

SRI totally redesigned the VALS typology to fix this error in
1989, and called the new product VALS2. Appendix A contains a visualization of
the VALS2 framework.

VALS2 was positioned at the time as
moving away from values and lifestyles because it was too fragmented and did
not adequately predict consumer behavior, which was shifting; instead, VALS2
was positioned as being designed to reveal unchanging psychological stances
(Riche, 1989). However, as recently as 1996, SRI acknowledges that the
attitudes of consumers can change, if not their VALS type (Heath, 1996). In
fact, VALS current literature positions VALS as a combination of
self-orientation and resources, noting that resources are the psychological,
physical, demographic and material means upon which people can draw; these resources
increase from adolescence through middle age, but decrease with extreme old age
or mental or physical deterioration
(http://future.sri.com/VALS/vals.segs.shtml).

Using a national sample of 2,500, SRI developed a 43-question
assessment tool that measures resources, including demographic information and
internal resources, such as confidence, energy and intelligence; in addition,
as noted above, the tool recognizes that resources tend to accumulate through
middle age, and then decline (Riche, 1989). VALS2 identifies eight attitude and
lifestyle segments, arranged primarily by three different orientations to
buying. However, at the top of the rectangle are actualizers. Actualizers make
up just 8% of the overall U.S. population (Bearden, Ingram & LaForge,
2001). Actualizers may be described as that segment of the population who have
high resources with a focus on principle and action, who are active,
take-charge in terms of expression of taste, independence and character. Their
demographic characteristics include a median age of 43 and median income of
$58,000 (Mowen & Minor, 1998). In addition, they are successful and
sophisticated, can indulge in self-orientations; 95 percent have some college
(Evans & Berman, 1997).

Other VALS2 categories include individuals who are oriented
toward principles (fulfilleds and believers). A primary differentiator between
the two groups is the resources available to them, which affects their approach
to lifestyles and values (Mowen & Minor, 1998). Fulfilleds make up
approximately 11% of the population, while believers represent 16%. Those who
are oriented toward status (achievers and strivers) focus on status and are
also segmented by resources, including a strong orientation toward money and
achievement. Achievers and strivers each represent 13% of the general
population. Action oriented individuals would include the categories of
experiencers and makers. Experiencers tend to be younger and focus on action as
a means of excitement, while makers focus on practical action. Again, a
differentiator between the two is the abundance or lack of resources.
Experiencers represent 12% of the population, while makers account for 13%.
Finally, VALS2 identifies the strugglers. Poor, with little education, the
strugglers have few resources and their focus is on living and surviving for
the moment. They represent 14% of the general U.S. population (Mowen &
Minor, 1998).

While SRI attempted to position VALS2 as representing a more
entrenched psychological approach, with less emphasis on values and lifestyles,
RISC (the International Research on Social Change) was incorporated in
Switzerland in 1978 to monitor social change and trends in European countries,
the United States, and Japan (Hasson, 1995). Like the reasoning behind VALS 2
and other psychographic tools, RISC decided to monitor social change due to the
realization that demographics provide decreasingly discriminating markets or
segmentation opportunities. Based a little more widely than psychological
typography, RISC adopts the statistical and conceptual tools of psychographics,
but tends to use a three dimensional approach to diagnose socio cultural
trends, market dimensions and demographics (Hasson, 1995).Depending on the brand and choice of study,
demographics could only explain 8-10% of brand choice for a particular brand;
psychographics, using typologies, from 25-35%; however, socio cultural trends
could explain 35-45% (Hasson, 1995). Appendix B depicts the RISC socio cultural
trends model. These socio cultural trends include balanced and autonomous (A),
eager and dedicated (B1), daring hedonist (B2), belongings and values (C1),
transitional (C2), petit bourgeois (C3), self-centered impulsive pleasurist
(C4), rational traditionalist (D1), anomy and disconnection (D2), withdrawn and
distressed (D3). In many ways, the descriptions mirror some of the lifestyles
and values of VALS, and the pyramid similarly seems aligned with resources.
However, unlike VALS2’s description of an entrenched psychological approach, RISC’s
methodology assumes that people and countries’ self-concept moves around the
trends in a more dynamic manner, according to environmental influences,
including the economy and social mores.Marshall Marketing uses this tool in the United States to help retailers
and broadcasters to monitor and predict social trends for brands (www.mm-c.com/RISC/risc.htm).

Psychographic
Variations

Wells (cited in Heath, 1995) noted that while psychographic
studies now come in an infinite number of variations, there are five general
types of psychographic study: 1) A lifestyle profile that includes questions on
product use, media use, and demographic information, as well as psychographic
and lifestyle information. Researchers then look for the information that
discriminates between groups of users and nonusers of products; 2) Product
specific psychographic profiles identifies the target group of consumers first,
and then uses psychographic product relevant dimensions to segment the users;
3) Personality traits as descriptors analyzes dependent variables (e.g.
specific attitudes, opinions or interests) and then uses personality traits as
independent variables are highly correlated to the dependent variable, which is
then used to segment markets; 4) General lifestyle segmentation is used to
define a typology. While it collects much of the same information as a
lifestyle profile, it does not assume what the common traits are, but does
attempt to identify significantly different groups or significantly homogenous
lifestyle segments. 5) Product specific segmentation alters general
psychographic or lifestyle questions and adapts them to product specific
statements, which are then analyzed, using factor analysis, to support or negate
a hypothesis regarding the product. Among these various uses, many
psychographic studies have been and are being conducted to determine the
psychographic values or lifestyles that aid the researcher in understanding the
why behind what consumers do and their addition to basic demographic
information.

Some
Psychographic Applications

While not purporting to be an exhaustive list of studies, it
is interesting to note some of the research to which psychographic measurements
have been applied, and their direct application to marketing.

Ailawadi, Nesline & Gedenk (2001) used psychographics and
demographics to identify value-conscious consumers and their perceptions of
store brands versus national brands. They found that store brand use correlates
with economic benefits and costs, and identified four specific market segments:
deal focused customers, store brand focused customers, the use-alls (those who
will go either way), and use-nones (those who don’t use either store brands or
deals). Their study used a structural model and discovered that demographics do
not affect consumer behavior directly, but are funneled through psychographics.
This study demonstrated how manufacturers and retailers could avoid marketing
their brands to the same segment in a consumer tug of war.

Eckman, Kotsiuopulos & Bickle (1997) used psychographics
to measure to examine the store patronage behavior of Hispanic versus
non-Hispanic consumer and the role of store attributes. Previous psychographic studies
on Hispanics have focused on sports, television viewing and religion.It is difficult to describe Hispanics as a
homogenous group because there are many national subcultures that make up the
Hispanic culture (Eckman, Kotsiuopulos & Bickle, 1997). However, they found
that Hispanic consumers are less likely to participate in cultural activities
and seek advice; however, they were more likely to experiment and proeducate.
Attributes that were important to Hispanic consumers included services,
language, resource management, pricing, comfort and selection. While
non-Hispanics purchased in family-owned stores and catalogues, Hispanics
purchased in second-hand stores more often.

McCarty and Shrum (1993) examined the role of personal values
and demographics in predicting television-viewing behavior. Using Rokeach’s LOV
and a structural equation analysis, their study found that values do relate to
television viewing, but the relationship and amount of influence is complicated
or sometimes reduced to non-significance when demographics are factored in.
They concluded that because the interrelationships between values, behavior and
demographics are so complex, that segmentation schemes should employ both
demographics and values in their consideration. They also found differences not
only in values, but also in the demographic information they measured (gender,
age, income and education) and their effects on viewing.

Lin (1999) furthered research in this area by examining the
relations between perceived television use and online access motives, using
uses and gratifications perspectives. However, she found a weak correlation
between user motives for television exposure and potential online access. The
study also noted that the online world, at least for now, tends to be supplementary
to television; however, when full convergence is achieved, there may be a need
for advertisers to adjust their approach to the online world. Lin also
criticizes SRI’s VALS2 for its lack of attention to measuring online users’
predisposition to technology, something that iVALS attempts to correct.

A number of studies have been conducted on psychographics and
travel related behavior. Silverberg, Backman and Silverberg (1996) investigated
the psychographics of nature-based travelers in the United States and their
relationship with attitudes about the environment, travel behavior and
demographics. Using factor analysis, they found that that travelers whose
primary nature-based activity was viewing nature participated in nature-based
activities differed from those whose trip was for educational purposes. They
also found differences between campers and non-campers and social travelers and
all other groups. Six variables were found to be significant predictors of
campers versus non-campers: education, age, likelihood of taking a nature-based
trip, conservationist attitude, consumptive attitude, and involvement in other
nature based activities. Non-campers are more highly educated, have a
consumptive attitude and more likely to take a nature-based trip. Campers, on
the other hand, tended toward conservationism and a greater involvement in
other nature related activities.

Without calling it psychographics per se, Stephens (1991)
conducted an interesting study linking cognitive age with consumer behavior,
especially when used in conjunction with demographic age. She found that it
provided important clues regarding attitudes toward purchasing and consuming,
and could aid targeting decisions, creative executions and media selection.

Ohanian (1990) used psychographics to construct and validate a
scale to measure celebrity endorsers’ perceived trustworthiness, expertise and
attractiveness. She found that source credibility, defined by these three
factors directly impacted intent to purchase and recommended that researchers
could use this tool to investigate the credibility of political candidates,
that advertisers use the scale as part of effectiveness testing and that
celebrity endorsers be calibrated against varying demographic and psychographic
groups.

Dychtwald and Zitter (1988) recommend that hospitals use
psychographics as part of their basic strategic marketing plan, noting that
this tool may especially be useful in targeting the elderly population. They identify
three separate segments from that group: The vitally active, who are still
involved in the world and continue to grow; the adapters who face significant
real health problems, but have either overcome or accepted those problems; the
overwhelmed, who are anxious about the future and unable to manage their
problems.

Hornick (1990) used psychographics to predict smoking
intensity and found that it was more meaningful and valid than consumer time
preference (which relates to the timing of an outcome and perceived payoffs/time
tradeoffs) and demographic characteristics. He discovered that adding
psychographic variables to demographic variables improved the explained
variance by more than 73%.

Wells (1975) noted that already as of that date,
psychographics had contributed to an understanding of opinion leadership,
retail shopping, private brand buying, consumer activism, store loyalty,
differences between Canada and the United States, as well as differences
between English and French speaking Canadians.

The
Future of Psychographics

With the continued interest in the psychological factors that
drive consumers to purchase, it is doubtful that the interest in psychographics
will lessen in the future. The running feud between quantitative advocates of
research and the qualitative advocates has abated with the more stringent
adoption of statistical methods, better use of computer based research and
applications in qualitative design (Heath, 1996). In fact, if anything, the
trend in research has shifted to the qualitative approach (Heath, 1996). Tools
such as VALS2 are being adapted to provide varying types of consumer
information. iVALS was constructed to focus on the attitudes, preferences, and
behaviors of Internet users, addressing some of the concerns Lin (1999) expressed.
Not only did early results reinforce the notion of a dual-tiered have/have not
society, it found that half of the web users were Actualizers, that three out
of four were men, and virtually all had gone to college (Heath, 1996). Not only
are broadcasters and cable channels tailoring their content according to their
viewers’ psychographic profiles (Heath, 1995), but marketers are attempting to
determine what their brands look like in consumers’ eyes (Heath, 1996).

Perhaps the biggest caveat, though, comes from Wells’ (1975)
seminal article.The tools may not be
valid or reliable if searching for relationships that do not exist, if they are
too abstract, or if the behavior studied is essentially redundant to other
variables. Hasson (1995), in discussing socio cultural models, notes that many
argue that models such as these are reductive and too systematic. He questions
whether the problem is the systematic nature of the model or whether
researchers fall too much in love with their model and reduce everything down
to their system. He further notes that there are no universal tools; in fact,
if research were in 100% agreement, it might be indicative of a totalitarian
society, but when clients successfully use the information, it might not be a
proof, but it is a reward (Hasson, 1995). The future use of tools such as
psychographics will be determined by the validity and reliability of the
instrument, the application’s usefulness, and its ability to predict consumer
behavior, which might not serve as a prove of their universal accuracy, but
will be rewarding to marketers that use the tool well.